Morgan Stanley Strategist Sees Risk of Slowing Earnings Growth in 2024
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Morgan Stanley strategist Michael Wilson sees signs that corporate profit margins may not expand as much as expected in 2024, making it harder for companies to meet earnings targets.
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Analyst EPS growth forecasts for 2023 Q4 have fallen sharply since September, declining 5.3% for the S&P 500.
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Wilson forecasts 7% EPS growth in 2024, below the 11.8% consensus forecast. He is less optimistic on the magnitude of margin expansion.
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Wilson will watch the PPI report on Wednesday for clues about companies' ability to boost sales growth, often key for profit growth.
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FactSet data shows 2024 profit margin estimates for the S&P 500 are very high historically, underlying optimistic EPS growth forecasts.